(Bloomberg) -- Abbott Laboratories shares fell after second-quarter demand for its Covid-19 testing products dropped by about 40%, even as the company posted stronger-than-expected profit and sales.
Revenue from Covid-19 testing products was about $1.3 billion, down from $2.2 billion in the first quarter, the Abbott Park, Illinois-based company said in a statement Thursday. The shift reflects a broad decline in Covid screenings in the spring as vaccine uptake increased and pandemic restrictions loosened.
The company’s diagnostics unit was the only segment to fall from the first quarter -- its medical devices, nutrition, and established pharmaceutical units all saw sales increase. While executives said fluctuations in demand due to the global rise of Covid variants and changing infection rates makes full-year profit harder to predict, Abbott stuck to the projection of $4.30 to $4.50 a share it first provided in June.
“Forecasting Covid is quite challenging,” Chief Financial Officer Bob Funck said on a conference call. “We feel really comfortable about the range we have and feel that kind of captures different scenarios around Covid testing.”
Shares fell 1.6% to $117.04 as of 12:16 a.m. in New York and have risen about 7% so far this year.
Adjusted earnings were $1.17 a share, more than double the year-earlier quarter and ahead of analysts’ average projection of $1.02. Revenue was $10.2 billion, compared with $7.3 billion in the year-earlier period and beating the average estimate of $9.7 billion.
The spread of the delta variant could spark a renewed uptick in screening, however, as fellow testing company Quest Diagnostics Inc. said Wednesday its testing volumes had slightly increased in recent weeks after a period of decline. Chief Executive Officer Robert Ford said Abbott hasn’t seen similar testing shifts yet, but suggested infection surges could increase global testing volumes in the coming weeks.
“I think we will see some of that -- the question will be geographically where are we going to see it more,” Ford said, adding that the increases may come in countries where infection rates are rising faster than in the U.S.
After broad declines during the pandemic in most kinds of routine medical care, Abbott’s medical devices unit has begun to rebound with revenue of $3.7 billion this quarter, up from about $3.1 billion in the same quarter of 2019. Diabetes care devices, including glucose monitors, made up the largest portion at $1.1 billion in sales.
Even if cases surge, Ford said the company doesn’t expect to see dips in demand similar to 2020. Abbott noted that organic sales, disregarding Covid testing, have increased 11% relative to the second quarter of 2019.
“The underlying business, excluding Covid sales, will be getting sequentially better every quarter,” Ford said.
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